Another central bank digital currency (CBDC) project has emerged, making waves in recent times. According to this, the Swiss National Bank (SNB) will collaborate with six commercial banks and the Swiss Stock Exchange to conduct pilot applications for the country’s official CBDC project known as the Swiss Franc wCBDC.
A Significant Step from Switzerland
The CBDC-centered pilot project, called Helvetia Phase III, will test the effectiveness of the Swiss Franc wCBDC in conducting digital securities transactions. The pilot project is built on the first two stages, Helvetia Phase I and II, conducted by the BIS Innovation Center, SNB, and SIX.
The participating banks in the pilot project, which are also engaged in commercial activities in the country, namely Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, UBS, and Zürcher Kantonalbank, continue to attract attention as member banks of the existing SIX Digital Exchange (SDX).
The Swiss wCBDC pilot project will operate on SDX and use the Swiss Interbank Clearing infrastructure. According to the announcement, the pilot project will start in December 2023 and continue until June 2024.
What’s Being Discussed in the Project?
During the pilot application phase, the participating banks will issue digital Swiss franc bonds, and these bonds will be programmed to operate according to the delivery versus payment logic against the wCBDC. All transactions conducted in this test environment will be collateralized with digital bonds and settled in wCBDC on SDX.
In addition to the in-house CBDC initiatives, the Swiss Financial Market Supervisory Authority has partnered with the Monetary Authority of Singapore (MAS) to conduct various crypto sector pilot initiatives with the Japan Financial Services Agency and the UK Financial Conduct Authority.
In these collaborations, officials aim to carry out pilot applications specifically related to fixed income, foreign exchange, and asset management products. MAS officials commented on the matter as follows:
“As the scale and complexity of pilot tests increase, there is a need for closer cross-border cooperation among policymakers and regulators.”
